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6 Refer to graphs A and B, below, of government spending and net tax revenues. Your Graph Score: 100% Your Graph Score: 0% Graph A

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6 Refer to graphs A and B, below, of government spending and net tax revenues. Your Graph Score: 100% Your Graph Score: 0% Graph A Graph B El 320 NTR 7 240 l/ \\. . u \\{o 160 E '32 1' 24 _ 5 a an a 2 i E g 150 3 o n 5 .E. a = E n 80 g 80 (3 -1 60 0 -240 100 200 300 400 500 600 U 100 200 300 400 500 600 Real GDP Real GDP a. Given the government spending and net tax revenues in graph A, draw the corresponding budget line, labelled BL1 in Graph B. Plot only the endpoints of BL1 in graph B. b. If government spending were to decrease by 20, draw the new government spending, 62, and budget lines, BL2. Plot only the endpoints of G2 in graph A and the endpoints of BL2 in graph B. c. After the change in government spending, the budget balance at a GDP level of $500 is a surplus o of $ 20 o

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